AR Sales Co. v. United States

49 Fed. Cl. 621, 2001 U.S. Claims LEXIS 108, 2001 WL 715651
CourtUnited States Court of Federal Claims
DecidedJune 22, 2001
DocketNo. 00-71C
StatusPublished
Cited by2 cases

This text of 49 Fed. Cl. 621 (AR Sales Co. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
AR Sales Co. v. United States, 49 Fed. Cl. 621, 2001 U.S. Claims LEXIS 108, 2001 WL 715651 (uscfc 2001).

Opinion

OPINION

BRUGGINK, Judge.

This action arises out of a construction contract in which plaintiff was terminated for default. It is brought under the Contract Disputes Act of 1978, as amended, 41 U.S.C. §§ 601-613 (1994). Plaintiff seeks damages and conversion of the termination for default into a termination for convenience. Pending are the parties’ cross-motions for summary judgment, defendant’s alternative Motion for Partial Summary Judgment, and defendant’s alternative Motion to Dismiss Count II of the Complaint. For the reasons set forth below, plaintiffs Motion for Summary Judgment is [623]*623denied, and defendant’s alternative Motion to Dismiss Count II of the Complaint is granted. Defendant’s Motion for Summary Judgment and alternative Motion for Partial Summary Judgment remain pending.

BACKGROUND2

Plaintiff is a minority-owned general contracting business. On June 5,1997, pursuant to the § 8(a) program3 of the Small Business Administration (“SBA”), the SBA proposed plaintiff to the Department of the Army (“Army”) as the SBA’s subcontractor to perform a contract to repair the sewer system of the Lee Area Family Housing complex at the United States Military Academy in West Point, New York.

As part of the solicitation and award process, the Army investigated plaintiffs financial status. The results of this investigation raised concerns about plaintiffs responsibility. These concerns were presented to the SBA in a letter dated September 22, 1997. The SBA responded in a letter dated September 24, 1997, advising the Army that “A.R. Contracting Co. w[ould] enter into a Teaming Agreement with Regis Contracting for the purposes of performing this project.” 4 This letter identified Regis Contracting (“Regis”) as a “Graduate 8(a) Firm that h[ad] the experience and expertise in performing this type of work.” In response to the SBA’s letter, the Army found plaintiff to be a responsible contractor and, on September 30,1997, awarded the contract to plaintiff as the § 8(a) contractor. Regis was plaintiffs subcontractor.

The contract price was $1,582,500.25. The contract contained several clauses that are set forth in the Federal Acquisition Regulations System (“FAR”).5 We quote here those FAR clauses that are relevant to our discussion. FAR 52.249-10, Default (Fixed-Price Construction), in pertinent part, stated:

(a) If the Contractor refuses or fails to prosecute the work or any separable part, with the diligence that will insure its completion within the time specified in this contract including any extension, or fails to complete the work within this time, the Government may, by written notice to the Contractor, terminate the right to proceed with the work (or the separable part of the work) that has been delayed.
(c) If, after termination of the Contractor’s right to proceed, it is determined that the Contractor was not in default, or that the delay was excusable, the rights and obligations of the parties will be the same as if the termination had been issued for the convenience of the Government.

In addition, the contract contained standard provisions with respect to termination for convenience (FAR 52.249-2 I); the com[624]*624mencement, prosecution, and completion of work (FAR 52.211-10); payments under fixed-price construction contracts (FAR 52.232-5); schedules for construction contracts (FAR 52.236-15); and liquidated damages (FAR 52.212-5). Finally, the contract included Department of Defense Supplement to the FAR (“DFAR”) 252.227-7003, Termination, which stated:

Notwithstanding any other provision of this contract, the Government shall have the right to terminate the within license, in whole or in part, by giving the Contractor not less than thirty (30) days notice in writing of the date such termination is to be effective; provided, however, that such termination shall not affect the obligation of the Government to pay royalties which have accrued prior to the effective date of such termination.

Almost from the moment the contract was signed, difficulties arose. Not until December 15, 1997, after problems regarding payment and performance bonds and proof of insurance were resolved, did the Army issue a Notice to Proceed (“NTP”) to plaintiff. The NTP required plaintiff to complete the contract by June 19, 1998.6 It also required that an Accident Prevention Plan (“Safety Plan”) and a Quality Control Plan (“Quality Plan”) be submitted “before commencement of work.”

Under its teaming agreement with plaintiff, Regis was supposed to prepare the Safety Plan and the Quality Plan required by the NTP. On December 19, 1997, and January 5, 1998, plaintiff requested that Regis provide these plans to the Army. As of the beginning of February 1998, Regis had not.

On February 3, 1998, the parties met to discuss progress. The Army was concerned that it had not yet received the Safety Plan, the Quality Plan, or a progress schedule. In response, plaintiff committed to sending, via express mail and by February 5, the requested plans and preliminary progress schedule. The current record indicates that plaintiff did not honor its commitment. Plaintiff alleges that defendant received the Safety Plan and the Quality Plan in mid-March. PL’s Proposed Findings If 35.7 Furthermore, plaintiff has offered no proposed finding indicating that a progress schedule was submitted to the Army before September 15, 1998. Instead, it alleges that, at a pre-construction conference held on February 10, 1998, plaintiff was directed not to perform any work under the contract until after the Contractor Quality Control Mutual Understanding Meeting. PL’s Proposed Findings 1132. To support its contention, plaintiff offers a document alleged to be a pre-construction outline executed by the parties. Defendant disputes this contention, pointing out that the referenced document is not dated and that it is unclear what meeting is referred to, when the document was executed, and who was in attendance at the alleged meeting. In any event, it is undisputed that the Mutual Understanding Meeting was held on April 6, 1998.

An additional difficulty arose in mid-March 1998. On March 18, plaintiff informed the Army that it could not begin performing because the Army had not yet identified an area for plaintiff to set up its construction trailer. It is unclear from the record how this problem was resolved.

Throughout the spring and summer of 1998, the parties continued to experience problems. On June 30, the Army notified plaintiff that the restoration of grassy areas after excavation was not being performed in a timely or satisfactory manner. On July 23, the parties met at the job site. At that meeting, several items of concern regarding plaintiffs performance were discussed. These included the following: (1) plaintiffs safety record;8 (2) the filing of an inaccurate accident report; (3) plaintiffs management [625]*625of its subcontractors;9 (4) the passage of a three-week period after the excavation subcontractor had been on-site; and (5) plaintiffs failure to submit weekly schedules that it had earlier promised to submit.

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Related

A.R. Sales Co. v. United States
51 Fed. Cl. 370 (Federal Claims, 2002)

Cite This Page — Counsel Stack

Bluebook (online)
49 Fed. Cl. 621, 2001 U.S. Claims LEXIS 108, 2001 WL 715651, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ar-sales-co-v-united-states-uscfc-2001.